Downtown Raleigh sees 2nd wave of craft beer bottle shops

From left, Woody Lockwood and Chris Powers (two of the guys behind State of Beer) work at the end of the bar in December 2014 at the newly opened State of Beer, a bottle shop, bar and cafe at Harrington and Hillsborough streets.
Juli Leonard
jleonard@newsobserver.com

From left, Woody Lockwood and Chris Powers (two of the guys behind State of Beer) work at the end of the bar in December 2014 at the newly opened State of Beer, a bottle shop, bar and cafe at Harrington and Hillsborough streets.
Juli Leonard
jleonard@newsobserver.com

Today, there are eight bottle shops between Fayetteville Street and the Five Points neighborhood. Across the Triangle, the N.C. Beer Guys blog lists 55 bottle shops. But this second wave of stores appears to be more like bars with a retail selection than traditional bottle shops with a few draft beers for beer geeks to sip sample while shopping.

That doesn’t suprise Zack Medford, who along with Ben Yannessa and Brad Bowles own Paddy O’Beers, a bottle shop and bar on Fayetteville Street that focuses on American craft beer. “It’s the neighborhood watering hole; that’s what the craft beer store has become,” Medford said.

Yannessa sees craft beer gaining ground in downtown Raleigh because more technology companies, such as Citrix and Red Hat, have opened offices here. Plus, more people are living within a 1-mile radius of downtown Raleigh; the number of apartments has gone from 784 units in 2012 to 1,428, according to Xceligent Karnes and the Triangle Apartment Association. That’s only going to increase with 1,508 apartments under construction.

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“The people who are attracted to Raleigh want more than a shot and Budweiser,” Yannessa said.

A craft beer state

Craft beer represents a growing sector of the U.S. beer market; it accounted for $14.3 billion of the $100 billion in beer sales in 2013, according to the Brewers Association, a not-for-profit trade association of small and independent brewers. The craft beer industry saw a 17.2 percent increase in sales in 2013 compared to 2012, while overall sales dropped 1.9 percent.

North Carolina is the fifth fastest-growing state for craft beer production with 125 breweries and 45 more in the works, according to the N.C. Craft Brewers Guild. The state’s breweries generate an estimated $791 million annually and employ about 10,000 people, according to 2012 numbers from national craft brewers association.

An inevitable evolution

Some of these newer bottle shops were opened by experienced restaurant and bar owners, like Medford and his business partners, who also own Coglin’s, an ’80s and ’90s bar, and Common 414, a craft cocktail bar, also on Fayetteville Street. Stag’s Head Beer Hall & Bottle Shop, which opened in August in the former Amra’s space in Glenwood South, is owned by Tracy Hancock, Harvey Gray and Malachy Noone, who also co-owns Bull McCabes Irish Pub in Durham. State of Beer, the only bottle shop among the new crop that serves a full food menu, is owned by Chris Powers, Woody Lockwood and David Meeker, who own Busy Bee Cafe and Trophy Brewing Co.

Hancock of Stag’s Head said, “It’s kind of an evolution of the original bottle shop concept. It is designed to encourage people to linger.”

Lockwood of State of Beer sees the evolution as inevitable. “You wouldn’t think of opening a bottle shop without drafts in 2015,” he said.

Many of the new bottle shops were opened by newcomers to the craft beer business. On Morgan Street, a few doors down from Irregardless Cafe, Drink Drank Drunk was opened in early December by video game artist Mark Lemmons and hairstylist Shannon Lamm, who owns Atomic Salon next door.

In Five Points, Wendy Harris opened Crafty Beer Shop in the summer of 2013 after working for Intel for 14 years. She has quickly expanded, opening a second location at Lafayette Village last summer and a wine bar with a small retail beer selection a few doors down from her original location a couple of months ago.

On Glenwood South, North Street Beer Station is owned by Faye and Billy Reese, who own a Raleigh-based health care consulting company.

Too many bottle shops?

At these hybrid businesses, many owners and managers see a business opportunity in getting people who favor Coors Light or Miller Lite to try Sierra Nevada or New Belgium beers. “That’s where the money is: converting the people who aren’t drinking it,” said Joshua Cootware, who manages North Street Beer Station.

Can the market bear all of this competition?

Harris of Crafty Beer Shop doesn’t think so. “I think you will see some consolidation. I don’t think the market can support this many bottle shops,” Harris said.

Johnny Belflower, owner of Tasty Beverage Co., said, “Things seem to be going well for everybody. Nobody seems to be copying each other. Can we support five or six more? I don’t know.”

Belflower’s business is good enough that he’s expanding to Asheville; he hopes to open a second shop by early April.